Abstract
Cities today can integrate waste management with urban transport to create circularity in city economies. This is possible through the production of a variety of future fuels such as bio-CNG, methanol, biodiesel from used cooking oil, and green hydrogen. Some Indian cities have also shown movement in this direction, prompted by the overarching policy framework at the central level that seeks to introduce such fuels. However, there are some challenges that need to be suitably addressed to ensure that the practice becomes mainstream. These challenges include policy and financing issues, which, if addressed, can unlock the potential and create significant benefits of decarbonisation beyond the activity of waste management. Climate finance can and should consider such activities, whether they are locally generated or through international sources.
A recent announcement from Karnataka got somewhat buried in the news cycle, though it deserved attention for a variety of reasons. Minister Nitin Gadkari launched buses in Bengaluru, but these were no ordinary buses (Sharma, 2023). These buses have been designed to run on a 15 percent methanol-diesel blend. Additionally, the first MD100 bus in India was unveiled as well. As part of the Mission Clean Energy, this is part of the fuel blending exercise being undertaken to reduce petrol and diesel consumption in India. NITI Aayog, the central government’s think tank, has been talking about coal to methanol (CTM) technology for some time (NITI Aayog, 2023). However, there is much more to methanol than coal, which also feeds into the functioning of cities that needs to be brought to the discussion table.
Cities have been the bedrock of human civilisation since time immemorial. They have served as centers of social and economic mobility for people from all walks of life. By 2050, two out of every three people are likely to be living in cities or other urban centers (UNDESA, 2018). This also holds true for India, and the trend has been captured in the Census numbers (Jana and Archita, 2019). It must also be pointed out that the 2011 Census reported a higher absolute growth in India’s urban population than rural population (The Hindu, 2016).
A growing urban population brings with it various challenges. For example, cities occupy only 2 percent of the Earth’s terrestrial surface but consume over 75 percent of natural resources. The majority of the decisions and actions needed to move our society towards sustainable development rest largely with cities. This creates opportunities for national and city leaders to improve resource efficiency, reduce carbon emissions and pollution, enhance ecosystems, and minimise environmental risks (UNEP, 2023). Infrastructure investments, which can stimulate urban economic activity, can be an opportunity to align economic growth with climate, environmental, and social equity agendas, provided they are accompanied by better integration of policy sectors and actions to maximise the benefits (European Environment Agency, 2021).
- In this regard, cities can also take the lead in creating opportunities and setting examples for others to emulate as we move towards achieving environmental and climate goals. One such goal is to ensure a sustainable transportation sector premised on the principles of the circular economy, which embodies the following features:
Clean and climate friendly; - Efficient and based on sustainable resource management;
- Dependent on energy supply that has a minimum environmental footprint; and
- Minimal waste generation.
Creating Circularity with Transport – Opportunities for Cities
A circular city aims to generate prosperity and economic resilience for itself and its citizens while decoupling value creation from the consumption of finite resources (WEF and PwC, 2018). Urban transport is one area in particular that can benefit from this approach. Transport has a significant contribution to India’s total greenhouse emissions at 11% (Pathania, 2023) and accounts for a fifth of India’s energy use. There are several fuels that can easily be substituted with equally useful alternatives, known as future fuels, which can be generated from various kinds of waste streams.
This is especially true in urban areas where we see that future fuels create opportunities for cities and their administrators to generate multiple benefits, thanks to the easy correlations created. For instance, bio-CNG generation from municipal solid waste, paired with buses that can run on the “clean” gas, is seen as an obvious choice (Wani, 2022). However, the developing landscape reflects more opportunities. For example, the production of bio- methanol from waste streams of certain industries and municipal solid waste offers opportunities to simplify the feedstock logistics and create transport sector linkages (Pathania, 2023). Methanol, as a versatile fuel for internal combustion engines, hybrid (fuel/electric) systems, fuel cells, turbine engines, and a potential liquid hydrogen carrier, has many roles to play (IRENA AND Methanol Institute, 2021).
Similarly, the horizon of wastewater treatment can be expanded to consider the production of green hydrogen for transport while preserving scarce freshwater supplies for drinking and sanitation (Jiang et al., 2022). Technology options that utilize wastewater for green hydrogen are available, and it is expected that the associated costs can be made competitive and financially viable (Bargash et al., 2022).
For instance, a recent project announcement by CEPSA showcases green hydrogen production by reusing recycled water from a wastewater treatment plant. This project is part of the development of Cepsa’s Andalusian Green Hydrogen Valley, the largest green hydrogen project in Europe (CEPSA, 2022). Similarly, research is ongoing to see how one or all of the five hydrogen production technologies, namely photo-fermentation, dark fermentation, photocatalysis, microbial photoelectrochemical processes, and microbial electrolysis cells (MECs), can be improved upon to increase yield. This hydrogen, blended with CNG to create (H-CNG) or for fuel cell/ICE utilisation, offers opportunities for creating circularity loops in wastewater treatment.
Necessity of Policy Interventions for City Governance
However, the rollout of such solutions also calls for imaginative thinking on the policy front. While the Green Hydrogen Mission talks about renewable methanol and green hydrogen production, the role of cities in catalysing the growth of the ecosystem has not received the attention it deserves. Action needs to be spurred in four directions.
Research support can be provided to programs undertaken jointly with city administrations on the rollout of such schemes. Examples can be seen in Australia and the EU on this subject. Pilots can be pioneered by select identified cities to demonstrate the same. This can serve the twin purpose of demonstrating feasibility and bringing down the cost of technology due to economies of scale. Industrial effluents, where possible, can also be utilized in association with industry for this purpose.
Schemes such as SATAT have covered the ground for the production of bio-CNG; however, given the multiplicity of waste streams, this, under the National Biofuels Policy, has helped create a market that creates a unique opportunity for cities. However, it is not the only option on the plate. Under the Biofuels Policy, one can also seek to create similar linkages on biodiesel and methanol for use in city transport. There are other new initiatives like the National Green Hydrogen Mission that can create avenues for city governments to think afresh about the role they can play. This makes it necessary to enable city governments to push for such projects. To make that happen, there is a need to have suitable frameworks that incentivize such projects and make them financially viable. One example of this can be seen in Indore, where buses are being run on bio-CNG generated from waste (The Economic Times, 2022). Linking hydrogen to fuel cell-based vehicles, for instance, can prove handy in the adoption at the city level. Learnings from existing programs like SATAT can definitely help identify the necessary steps. Clearly, there is a need to identify and implement similar strategies while widening the horizon of future fuels that can be produced and utilised.
A critical aspect of this would be ensuring technical assistance and capacity building for city governments on the subject. Much of the technology, though well understood, has complexities. This entails the support of organisations that can help train manpower and create capacity – institutional and individual – so that cities can conceptualise, initiate, and manage such projects either by themselves or in collaboration with industry. Such programs can be offered as online training modules similar to the ones offered by the National Institute of Urban Affairs (NIUA) under their Smartnet program.
One aspect that often gets overlooked is the need to connect city-based transport services like bus undertakings to policies and initiatives like the National Biofuels Policy, SATAT, and the National Green Hydrogen Mission, among other initiatives. This would result in the failure of the initiative, however effective it may be, because, as we saw in the case of SATAT, pickup happened only because a market was identified and the demand in public transport was suitably mapped with the supply. Cities and state governments, therefore, have to be coaxed to move their fleets towards such fuels. This is slightly complex, given how city-level bus services are increasingly being moved towards the adoption of electric buses and other vehicles. However, this becomes a diversion for an important point – the existing operational fleets continue to rely on conventional fuels. The retrofitment cost of vehicles to switch them towards future fuels would not cost much for the city transport undertaking. Keeping a diverse fleet also helps make transport undertakings resilient to uncertainties that may arise due to unforeseen disasters that disrupt power supplies, a scenario where electric buses would not be very useful.
Addressing the Financing Challenges is Critical
“Financing remains a challenge for the promotion of waste management and linking it to transport and/or other energy services. This has been particularly noted by the Parliamentary Standing Committee on Petroleum and Natural Gas, where the report pointed out that the arrangement of low-cost finance was necessary for bio-CNG projects because projects have to be designed in such a way that there are more than one revenue stream (Parliament Standing Committee on Petroleum & Natural Gas, 2022). City finances can often be a challenge in India as their capacity to raise their revenue gets constrained by a variety of reasons beyond their political and administrative control. However, in recent times, efforts have been made to raise financing through innovative means.
Climate financing and patient capital availability at the project level can definitely be of value for industries, particularly businesses that work to manage waste and generate alternative fuels. In particular, it is evident from the bio-CNG experience in India that financial institutions would prefer some credit support mechanisms that instill confidence in projects they lend to. A risk-sharing mechanism that can insure loans under such schemes to aid project developers must therefore be set up under the Mission Clean Energy. To that end, linkages with special international funding, like the Green Climate Fund, through a programmatic approach should definitely be considered. An upcoming carbon market protocol developed locally can also help make projects viable so that financial institutions can seriously consider investing in such projects.
One of the reasons affecting project- level finances is the cost of procuring waste. Given how cities see waste sales as a revenue stream, a distinct challenge is posed. While under the Solid Waste Management Rules, cities can charge residents for solid waste, its applicability is rarely seen, driven by political considerations. In such a scenario, a strategy is also needed to ensure that procurement costs remain reasonable. A fund that helps support companies by compensating municipalities for the reduced selling price of waste streams may also be contemplated.
Circular economies in cities are an excellent example of achieving multiple objectives in a singularly focused manner. Whether it is encouraging lifestyle improvement as envisaged in Mission LiFE, decarbonizing and greening transportation, or encouraging waste management that helps improve city cleanliness, circularity for transportation in cities is an opportunity that can also create benefits for cities and fill a critical need for creating transitions in the transport sector at large. However, policy action needs to be undertaken that creates the right incentive mechanisms to encourage cities and enable their journey forward.”
Views expressed by Rohit Pathania — The author is an energy and environmental researcher who is associated with the Centre for Clean Mobility at OMI Foundation.
